Canada growth rebounds to 2.3% after oil price blow

Exports rose 9.4% in the third quarter led by automobiles and consumer goods

Canada’s economy grew for the first time in three quarters with gains in automotive exports and consumer spending overtaking the damage from lower oil prices.

The quarter ended with a monthly contraction of 0.5 per cent for September, the largest since March 2009, as fires and maintenance shutdowns interrupted oil production.

Gross domestic product expanded at a 2.3 per cent annualised pace from July to September, Statistics Canada said yesterday in Ottawa, matching the median of an economist survey.

Canada’s “two-speed” economy — defined by low oil prices and momentum outside of the energy sector — needs until the middle of 2017 to get back to full capacity, Bank of Canada Governor Stephen Poloz predicts. The central bank makes its next interest-rate decision today.

Poloz cut interest rates in January and July to counteract the oil price shock, which led to a depreciation of the country’s currency and is providing a boon to automakers and other goods makers.

Exports rose 9.4 per cent in the third quarter led by automobiles and consumer goods, while imports declined 2.9 per cent, Statistics Canada said. Consumer spending gained at a 1.8 per cent annualised pace. The pace of growth was slowed by a 3 per cent decline in business investment, the third drop in a row. Government expenditures also declined by 1.6 per cent.

Third-quarter growth almost matches the Bank of Canada’s most recent forecast for a 2.5 per cent increase. The central bank also said output growth would slow to a 1.5 per cent pace between October and December.